Constellation Energy and MidAmerican Energy Holdings Company Jointly Terminate Merger Agreement
December 17 2008 - 10:35AM
Business Wire
Constellation Energy (NYSE: CEG) and MidAmerican Energy Holdings
Company today announced they have jointly reached agreement to
terminate their Sept. 19, 2008, merger agreement, and as a result,
the previously announced Dec. 23, 2008, shareholder meeting to vote
on the MidAmerican merger has been canceled. On Sept. 22, 2008,
MidAmerican provided $1 billion of needed capital to Constellation
Energy to assist them in continuing their business operations
during unprecedented times of global financial stress. Under the
provisions of the termination agreement MidAmerican will receive a
$175 million termination fee. In addition, the preferred shares
issued to MEHC Investment, Inc., a wholly owned subsidiary of
MidAmerican, will convert, and MEHC Investment, Inc. will receive a
$1 billion note at 14 percent interest, maturing Dec. 31, 2009;
approximately 20 million shares of Constellation Energy common
stock, representing 9.99 percent of outstanding shares; and
approximately $418 million in cash. Additionally, the $350 million
liquidity resource will terminate. �We greatly appreciate the
professionalism, good faith and cooperation MidAmerican�s
management and board have shown since we first initiated
discussions in September,� said Mayo A. Shattuck III, chairman,
president and chief executive officer of Constellation Energy.
�Based on a careful process to examine all alternatives available
to our shareholders and other stakeholders, we believe that
termination of the merger agreement is in the best interest of all
parties.� �We were pleased to have been able to quickly provide a
significant amount of capital that was critical to Constellation
Energy as they went through unprecedented financial times. We
appreciate the relationships we have built with the Constellation
Energy team and wish them success as they pursue an alternative
transaction,� said Gregory E. Abel, president and chief executive
officer of MidAmerican. The companies will make appropriate filings
to notify regulatory agencies that the proposed transaction has
been terminated. About Constellation Energy Constellation Energy
(http://www.constellation.com), a FORTUNE 125 company with 2007
revenues of $21 billion, is the nation�s largest competitive
supplier of electricity to large commercial and industrial
customers and the nation�s largest wholesale power seller.
Constellation Energy also manages fuels and energy services on
behalf of energy intensive industries and utilities. It owns a
diversified fleet of 83 generating units located throughout the
United States, totaling approximately 9,000 megawatts of generating
capacity. The company delivers electricity and natural gas through
the Baltimore Gas and Electric Company (BGE), its regulated utility
in Central Maryland. About MidAmerican Energy Holdings Company
MidAmerican Energy Holdings Company, based in Des Moines, Iowa, is
a global provider of energy services. Through its energy-related
business platforms, MidAmerican provides electric and natural gas
service to more than 6.9 million customers worldwide. These
business platforms are Pacific Power, Rocky Mountain Power and
PacifiCorp Energy, which comprise PacifiCorp; MidAmerican Energy
Company; CE Electric UK; Northern Natural Gas Company; Kern River
Gas Transmission Company; and CalEnergy. Information about
MidAmerican is available at www.midamerican.com. Forward-Looking
Statements This press release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995.�Words such as �anticipate,� �believe,� �plan,� �estimate,�
�expect,� �intend,� �will,� �should,� �may,� and other similar
expressions are intended to identify forward-looking
statements.�Such statements are based upon the current beliefs and
expectations of our management and involve a number of significant
risks and uncertainties, many of which are difficult to predict and
generally are beyond the control of Constellation Energy and
MidAmerican.�Actual results may differ materially from the results
anticipated in these forward-looking statements.�Factors that could
cause Constellation Energy�s results to differ materially from
those described in the forward-looking statements can be found in
Constellation Energy�s periodic reports filed with the Securities
and Exchange Commission, which are available at the Securities and
Exchange Commission�s Web site (www.sec.gov) at no
charge.�Constellation Energy assumes no responsibility to update
any forward-looking statements as a result of new information or
future developments except as expressly required by law.
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